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Slam the brakes on standard business mileage deduction

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in Small Business Tax,Small Business Tax Deduction Strategies

The IRS recently announced that the standard mileage rate for business drivers in 2010 is just a half a buck for each business mile traveled. (IRS Revenue Procedure 2009-54) That’s a nickel a mile less than the rate allowed in 2009.

Strategy: Switch to the “actual expense” method for this year. Even if you initially started using the standard mileage rate in January, you still can come out ahead if you change your record-keeping habits now.

However, if you started using the actual expense method in the first year the vehicle was placed in service, you generally can’t switch to the standard mileage deduction in subsequent years (e.g., if you claimed accelerated depreciation). Also, if you’ve been using the standard mileage rate for a leased car, you must continue to use that method for the entire lease period.

Here’s the whole story: When you use your own vehicle for business driving, you can deduct your out-of-poc...(register to read more)

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